Lyle Greenberg doesn’t like taxes. Especially the ones he thinks are unfair. But Greenberg, a Woodland Hills attorney, isn’t just grousing with his friends and colleagues about what he considers the onerous aspects of Los Angeles’ city business tax. He’s taking his complaints to the State Capitol. “We’re going to have an opportunity to meet with legislators and get some support,” said Greenberg of a lobbying expedition he and other Valley business leaders will make later this month to Sacramento. The group, organized by the United Chambers of Commerce, will meet with state legislators April 22, asking for legislation that will put pressure on city officials to reform their business tax. At the heart of the new reform effort is a city-appointed Business Tax Advisory Committee report released in November, dubbed a “Blueprint for Business Tax Reform,” which aims to push city officials into amending the tax plan. With that blueprint in mind, business leaders will lobby legislators to support an Assembly bill that would link the city’s computers with the state Franchise Tax Board’s database. They also want an amendment to the state constitution that would allow taxes to be based on gross income rather than gross receipts, something now barred by the constitution. Gross receipts, reform advocates say, include internal transactions and reimbursement of company funds, making them appear as if they were revenue, thus taxable. “We are going to meet with a lot of people and let them know how we as business people feel,” said Carol Amenta, president of the Woodland Hills Chamber of Commerce. One of the reform drive’s main goals is to increase tax enforcement. According to the committee’s report, a third of all businesses don’t pay the tax. But under Assembly Bill 63 by Gil Cedillo (Dem. Boyle Heights), the city would be able to link up with state computers that would make it easier to keep tabs on business tax cheats and impose liens and fines. Cedillo said the city has been hurt by the departure of businesses that blame the business tax for their exits. But more importantly, he said, the city must recoup its losses from those who have failed to pay their fair share of the tax. At the same time, in order to implement full business tax reform, the state’s constitution must be amended to eliminate the so-called double tax, said Rocky Delgadillo, a Los Angeles deputy mayor campaigning for tax reform. Delgadillo is also running for city attorney. Double taxation Tax reform advocates complain that businesses often are taxed twice, first on the revenue in a business transaction, then when that same revenue is moved from one segment of a company to another. Michele Morley, director of lawyer referrals for the San Fernando Valley Bar Assn., said the double tax particularly impacts lawyers. “If an attorney advances costs to a client, like in a liability case, he gets taxed on that money when he is reimbursed. It doesn’t make sense,” she said. “Tax reform is going to cost $20 million to $25 million, but in the end it should pay for itself,” said Delgadillo. While similar reform efforts have stalled in the past, Amenta says she’s optimistic that this newest proposal may fly. “I think this is the way to do it, rather than a referendum or something like that where you don’t have a dialogue,” she said. In its report, the Business Tax Advisory Committee claimed the tax rules are so convoluted and complex that many routinely fail to pay their taxes or deliberately underpay. “It’s just a sorry situation,” Amenta said. City Councilman Alex Padilla says he supports the effort to reform the city’s outdated business tax, but added that it must not reduce the city’s revenue. Delgadillo says the current plan will ultimately add more revenue by creating a more equitable system that would attract more businesses. “Our business tax is currently Byzantine and complicated and that’s the message we give to businesses,” he said. “Simplification is our primary goal and we want to make it easier for the tax department and businesses.” The business tax, the city’s fourth largest source of revenue, provides about $300 million every year. The new tax reform proposal aims to streamline the tax process by calling on strict enforcement of the tax code, citing current lax efforts that allow businesses to skirt the law and pay no taxes. “The problem we have now is that we can’t catch these people. We don’t have a way of tracking them,” Delgadillo said, noting that Cedillo’s AB 63 would help. For the committee’s current reform proposal to work, the city must approve a series of ordinances, all of which, according to Delgadillo, may take nearly two years, even if an amendment is passed. Among the proposal’s elements are: – Revamping and fully funding the Tax and Permit Department, – Developing an Internet-based tax collecting system, – A proposed amnesty program for certain violators, – Appointment of a tax ombudsman to deal with disputes, – Funding for studies on job and revenue growth and, eventually, rate reductions. Jacque McMillan, governmental affairs chairwoman for the United Chambers, said the 37-member contingent will raise concerns about other business-related issues at the same time. “We want them to know where we stand,” she said, on, for instance, education, health care, housing, transportation and energy. The United Chambers represents 21 Valley chambers of commerce and 8,000 businesses.